Brent Crude Oil Surges on Ukraine-Russia Tensions

Brent crude held slightly above $111 today, the highest levels since end of 2013, as tensions over Russia’s military intervention in Ukraine has triggered fears of energy supply disruption across Europe and rattled international markets.

In the wake of the Russian invasion of Crimea region over the weekend, U.S oil hit a 5-1/2-month high at the beginning of the week.

Brent crude went up 2 cents to trade at $111.22 a barrel by 0503 GMT in April last year. It had closed the prior session at its highest since Dec. 27. Still in April U.S crude delivery was at $104.70, a decrease by 22 cents, drifting near its highest since 20^th of September.

“The major support at the moment is the situation in Ukraine and the risk to European gas supply,” said Ric Spooner, chief analyst at CMC Markets in Sydney. “There is a collective market view that they are likely to wait on developments before they take prices any further” continued Spooner as reported by Reuters.

Russia’s intervention in Ukraine sent shockwaves in the Ukrainian financial market, which saw it report a huge decline on Monday. Investors rushed to dump riskier assets like stocks in favor of consumer commodities like oil and gold. Besides the stocks, bonds and the Ukraine rouble plunge to one of their lowest levels in as many weeks

The gas market is also facing uncertainty. Russia which is the biggest supplier of gas in Europe, supplies around a third of its gas exports through Ukraine

“It probably isn’t in anybody’s interest to stop the Russian gas flow to the rest of Europe but it’s possibly something that might be used as a bargaining lever by either side,” Spooner said according to Reuters.